Sunday, September 25, 2005

NTUC's plan for low income workers

NTUC has suggested that workers earning less than $1,000 be exempted from CPF. This will save them 20% of their wages. They need the full wages to meet a basic lifestyle, due to the high cost of living in Singapore.

NTUC suggested that the government should top up the CPF savings of these low income workers, so that they can buy their HDB flat.

I think that this is a wonderful idea.

In some countries, the government pays people who do not work. It is called unemployment benefit.

The approach by NTUC is to encourage these unemployed workers to work, even if it is a low income job. The government can help them by contributing to their CPF savings. It is an indirect way to give some help to these workers, but they must work.

1 comment:

  1. This is my reply to Moody Music.

    At present, the employers pay the market rate. This market rate is inadequate for the low income workers.

    If the government pays the CPF contribution, it is indirectly giving some assistance to the low income workers and keeping the business cost low for the employer.

    This is a win-win solution.

    Of course, the taxpayer has to bear this cost. But this is better than unemployment benefit adopted in other countries.

    I do not think that the employer can suppress the wages more, because of the CPF subsidy. The employer will still pay the market rate.

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